Due in large part to federal government policy failings, renewable energy has had a rocky ride in the US thus far this year. For the most part, we despise politics and politicians. Many would rather the issues were resolved by unrestricted economic competition.
However, in the real world, government regulations have a significant impact on how business is conducted. Everyone lamented how Japan was consuming the world forty years ago. Japan Inc. was created as a result of the government and business working closely together. Because of its government’s strong promotion of regulations that are in its favor, China is currently eating everyone’s lunch when it comes to the production of solar panels, batteries, and electric vehicles.
2022 RENEWABLE ENERGY CRASH Because of government incentives that offer significant tax savings to people who invest in renewable energy sources like wind and solar, the use of renewable energy in the US has skyrocketed during the past ten years. Even Nevertheless, American Clean Power says that in the first half of 2022, renewable installation levels dropped dramatically. Why? because of uncertainty and concern over federal policy support, partly brought on by the obstinacy of Democratic senator Joe Manchin, who repeatedly scuttled efforts by the Biden administration to embrace renewable energy legislation.
Yes, Greedy Joe has become a hero after learning that his coworkers and those in West By God, Virginia, who were fed up with his stonewalling antics, were shunning him. Manchin has apparently found faith, but in the meanwhile, the decline in wind and solar installations so far this year was primarily due to his obstructionism. Predictability, not an on-again, off-again charade from a hillbilly who has outgrown his britches, is what business wants.
According to ACP, the second quarter of this year saw a sharp slowdown in clean power installations, with 3,188 MW of new clean power capacity coming online. This represents a 55% decrease from the same time previous year. In 27 states, the industry put in place 41 solar projects, 14 storage projects, and 5 wind projects. The accompanying graph demonstrates how severely Washington’s deadlock on policy affected the country.
The demand for clean energy is impacted by Congressional inactivity, uncertainty over long-term tax policy, tariff and trade barriers, and transmission limitations at a time when we need to be accelerating development, according to Heather Zichal, head of ACP.
Due to delays in power grid interconnections and supply chain slowdowns, onshore wind power installations decreased by 78%. According to the ACP research, more than 32.4 gigawatts of clean power projects have been postponed before the end of 2021. This amount of energy could power 6.5 million homes and provide 110,000 jobs.
A BRILLIANT SECTION IS GRID SCALE STORAGE. Grid scale energy storage, which witnessed a 4-fold rise in Q1 2022 from the first quarter of 2021, according to ACP , is one bright spot in the bleak renewable energy landscape. Given that installations are normally back-weighted to the second half of the year, the first quarter of 2022 was by far the greatest first quarter for grid scale installations ever. According to Vanessa Witte, senior analyst with Wood Mackenzie’s energy storage team, the West Coast and Southwest continue to lead for both standalone and hybrid systems.
ACP claims that despite tremendous growth, there are still short-term challenges for the grid scale business. The Department of Commerce’s anti-dumping and countervailing duties solar tariff inquiry, which was launched in March, disrupted the market, causing procurement to halt, which considerably reduced predictions for hybrid projects in 2022 and to a smaller amount in 2023.
The recent decision by the Biden Administration to delay AD/CVD solar tariffs for two years brings certainty back to the markets for solar and energy storage. According to John Hensley, Vice President of Research and Analytics at ACP, well over 50% of utility storage projects are associated with solar farms, thus this significant executive action will assist the energy storage business continue to grow.
With 334 MWh installed in Q1, residential storage also had its best quarter to date, breaking the previous record of 283 MWh set in Q4 of last year. According to Chloe Holden, analyst with Wood Mackenzie, despite difficult supply conditions continuing to restrain residential storage, the market saw over 20,000 installations in a single quarter for the first time and were seeing large and small installers forge new vendor partnerships to help meet rising customer demand. In all, all segments of the US energy storage market gained 2,875 MWh and 955 MW in the first quarter of 2022.
THE CONCLUSION Politics and policies are important. Lack of clear policies has caused the US to lose significant momentum toward its renewable energy targets, in large part due to the mulish obstinance of one individual. The bottleneck appears to have been broken at this time. It’s time to resume work on making renewable energy a reality by supplying all homes and businesses in America with emissions-free electricity. Clean energy will be essential to achieving America’s goal of becoming a world power.
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